Nvidia’s fourth-quarter earnings report has sparked a selloff in semiconductor and AI stocks.
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The chipmaker reported data center revenue nearly doubling from the same quarter last year, but the results seem to have disappointed investors. Nvidia shares dropped more than 8% on Thursday, extending the stock’s loss to over 10% for the year.
Other chipmakers like Broadcom and Micron also fell sharply, losing more than 6%. The PHLX Semiconductor Index dropped 6% as well. The downturn in Nvidia’s stock impacted major indexes.
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Nvidia just crushed its earnings report, and here’s why it matters for the entire tech sector:
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The tech-heavy Nasdaq Composite ended the day down 2.8%. The S&P 500 declined by 1.6% with seven of its 11 sectors in the red.
Nvidia earnings trigger widespread stock selloff
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Market reactions indicate concerns about excessive spending in the AI sector and broader economic conditions.
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Options pricing had suggested Nvidia’s shares could rise or fall by 8% this week, but the response was heavily negative. The AI stock selloff went beyond Nvidia.
Super Micro Computer, an AI server maker, saw shares plummet 16%. Nuclear power provider Vistra dropped 12%. Palantir, another popular AI stock, slid 5%.
Investors have been pulling back from highly-valued AI stocks, a trend starkly evident during Thursday’s trading. The selloffs reflect growing skepticism about the sustainability of the recent AI boom.
